Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - CRAWFORD & CO | d588970dex992.htm |
| EX-10.1 - EX-10.1 - CRAWFORD & CO | d588970dex101.htm |
| EX-2.1 - EX-2.1 - CRAWFORD & CO | d588970dex21.htm |
| 8-K - FORM 8-K - CRAWFORD & CO | d588970d8k.htm |
Exhibit 99.1
CRAWFORD & COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| Year Ended December 31, 2017 |
Historical 2017 |
Pro Forma Adjustments |
Notes | Pro Forma | ||||||||||||
| Revenues: |
||||||||||||||||
| Revenues Before Reimbursements |
$ | 1,105,832 | $ | 76,200 | (a | ) | $ | 1,029,632 | ||||||||
| Reimbursements |
57,877 | 13,006 | (a | ) | 44,871 | |||||||||||
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| Total Revenues |
1,163,709 | 89,206 | 1,074,503 | |||||||||||||
| Costs and Expenses: |
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| Costs of Services Provided, Before Reimbursements |
784,111 | 57,829 | (a | ) | 726,282 | |||||||||||
| Reimbursements |
57,877 | 13,006 | (a | ) | 44,871 | |||||||||||
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| Total Costs of Services |
841,988 | 70,835 | 771,153 | |||||||||||||
| Selling, General, and Administrative Expenses |
239,840 | 22,876 | (a | ) | 216,964 | |||||||||||
| Corporate Interest Expense, Net |
9,062 | — | 9,062 | |||||||||||||
| Goodwill Impairment Charges |
19,598 | — | (g | ) | 19,598 | |||||||||||
| Restructuring and Special Charges |
12,084 | — | (g | ) | 12,084 | |||||||||||
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| Total Costs and Expenses |
1,122,572 | 93,711 | 1,028,861 | |||||||||||||
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| Other Income (Expense) |
1,125 | — | 1,125 | |||||||||||||
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| Income (Loss) Before Income Taxes |
42,262 | (4,505 | ) | 46,767 | ||||||||||||
| Provision (Benefit) for Income Taxes |
15,039 | (1,745 | ) | (b | ) | 16,784 | ||||||||||
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| Net Income (Loss) |
27,223 | (2,760 | ) | 29,983 | ||||||||||||
| Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |
442 | — | 442 | |||||||||||||
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| Net Income (Loss) Attributable to Shareholders of Crawford & Company |
$ | 27,665 | $ | (2,760 | ) | $ | 30,425 | |||||||||
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| Earnings (Loss) Per Share - Basic: |
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| Class A Common Stock |
$ | 0.53 | $ | (0.05 | ) | $ | 0.58 | |||||||||
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| Class B Common Stock |
$ | 0.45 | $ | (0.05 | ) | $ | 0.50 | |||||||||
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| Earnings (Loss) Per Share - Diluted: |
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| Class A Common Stock |
$ | 0.52 | $ | (0.05 | ) | $ | 0.57 | |||||||||
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| Class B Common Stock |
$ | 0.45 | $ | (0.05 | ) | $ | 0.50 | |||||||||
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| Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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| Class A Common Stock |
31,322 | 31,322 | 31,322 | |||||||||||||
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| Class B Common Stock |
24,606 | 24,606 | 24,606 | |||||||||||||
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| Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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| Class A Common Stock |
32,158 | 32,158 | 32,158 | |||||||||||||
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| Class B Common Stock |
24,606 | 24,606 | 24,606 | |||||||||||||
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CRAWFORD & COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| Three Months Ended March 31, 2018 |
Historical 2018 |
Pro Forma Adjustments |
Notes | Pro Forma | ||||||||||||
| Revenues: |
||||||||||||||||
| Revenues Before Reimbursements |
$ | 273,104 | $ | 15,953 | (a | ) | $ | 257,151 | ||||||||
| Reimbursements |
17,283 | 6,663 | (a | ) | 10,620 | |||||||||||
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| Total Revenues |
290,387 | 22,616 | 267,771 | |||||||||||||
| Costs and Expenses: |
||||||||||||||||
| Costs of Services Provided, Before Reimbursements |
197,619 | 11,229 | (a | ) | 186,390 | |||||||||||
| Reimbursements |
17,283 | 6,663 | (a | ) | 10,620 | |||||||||||
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| Total Costs of Services |
214,902 | 17,892 | 197,010 | |||||||||||||
| Selling, General, and Administrative Expenses |
61,660 | 7,249 | (a | ) | 54,411 | |||||||||||
| Corporate Interest Expense, Net |
2,564 | — | 2,564 | |||||||||||||
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| Total Costs and Expenses |
279,126 | 25,141 | 253,985 | |||||||||||||
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| Other Income |
1,135 | — | 1,135 | |||||||||||||
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| Income (Loss) Before Income Taxes |
12,396 | (2,525 | ) | 14,921 | ||||||||||||
| Provision (Benefit) for Income Taxes |
3,966 | (651 | ) | (b | ) | 4,617 | ||||||||||
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| Net Income (Loss) |
8,430 | (1,874 | ) | 10,304 | ||||||||||||
| Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |
139 | — | 139 | |||||||||||||
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| Net Income (Loss) Attributable to Shareholders of Crawford & Company |
$ | 8,569 | $ | (1,874 | ) | $ | 10,443 | |||||||||
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| Earnings (Loss) Per Share - Basic: |
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| Class A Common Stock |
$ | 0.16 | $ | (0.03 | ) | $ | 0.19 | |||||||||
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| Class B Common Stock |
$ | 0.14 | $ | (0.03 | ) | $ | 0.17 | |||||||||
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| Earnings (Loss) Per Share - Diluted: |
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| Class A Common Stock |
$ | 0.16 | $ | (0.03 | ) | $ | 0.19 | |||||||||
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| Class B Common Stock |
$ | 0.14 | $ | (0.03 | ) | $ | 0.17 | |||||||||
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| Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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| Class A Common Stock |
31,199 | 31,199 | 31,199 | |||||||||||||
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| Class B Common Stock |
24,472 | 24,472 | 24,472 | |||||||||||||
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| Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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| Class A Common Stock |
31,761 | 31,761 | 31,761 | |||||||||||||
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| Class B Common Stock |
24,472 | 24,472 | 24,472 | |||||||||||||
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CRAWFORD & COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2018
(In Thousands, Except Par Values)
| Pro Forma Adjustments |
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| Historical | Notes | Pro Forma | ||||||||||||||
| ASSETS |
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| Current Assets: |
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| Cash and Cash Equivalents |
$ | 63,956 | $ | 36,472 | (c | ) | $ | 100,428 | ||||||||
| Accounts Receivable, Net |
173,554 | (30,533 | ) | (d | ) | 143,021 | ||||||||||
| Unbilled Revenues, at Estimated Billable Amounts |
132,915 | (17,432 | ) | (d | ) | 115,483 | ||||||||||
| Income Taxes Receivable |
4,109 | — | 4,109 | |||||||||||||
| Prepaid Expenses and Other Current Assets |
24,651 | (2,458 | ) | (d | ) | 22,193 | ||||||||||
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| Total Current Assets |
399,185 | (13,951 | ) | 385,234 | ||||||||||||
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| Net Property and Equipment |
41,869 | (4,282 | ) | 37,587 | ||||||||||||
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| Other Assets: |
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| Goodwill |
98,462 | — | 98,462 | |||||||||||||
| Intangible Assets Arising from Business Acquisitions, Net |
96,224 | — | 96,224 | |||||||||||||
| Capitalized Software Costs, Net |
88,627 | (11,871 | ) | (d | ) | 76,756 | ||||||||||
| Deferred Income Tax Assets |
23,398 | 5,066 | (e | ) | 28,464 | |||||||||||
| Other Noncurrent Assets |
72,134 | (3 | ) | (d | ) | 72,131 | ||||||||||
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| Total Other Assets |
378,845 | (6,808 | ) | 372,037 | ||||||||||||
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| Total Assets |
$ | 819,899 | $ | (25,041 | ) | $ | 794,858 | |||||||||
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| LIABILITIES AND SHAREHOLDERS’ INVESTMENT |
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| Current Liabilities: |
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| Short-Term Borrowings |
$ | 24,546 | $ | — | $ | 24,546 | ||||||||||
| Accounts Payable |
41,982 | (4,866 | ) | (d | ) | 37,116 | ||||||||||
| Accrued Compensation and Related Costs |
64,670 | (2,386 | ) | (d | ) | 62,284 | ||||||||||
| Self-Insured Risks |
11,994 | — | 11,994 | |||||||||||||
| Income Taxes Payable |
3,193 | 697 | (e | ) | 3,890 | |||||||||||
| Deferred Rent |
15,839 | (2,390 | ) | (d | ) | 13,449 | ||||||||||
| Other Accrued Liabilities |
43,740 | — | (d | ) | 43,740 | |||||||||||
| Deferred Revenues |
37,182 | (2,324 | ) | (d | ) | 34,858 | ||||||||||
| Current Installments of Capital Leases |
557 | (295 | ) | (d | ) | 262 | ||||||||||
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| Total Current Liabilities |
243,703 | (11,564 | ) | 232,139 | ||||||||||||
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| Noncurrent Liabilities: |
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| Long-Term Debt and Capital Leases, Less Current Installments |
242,202 | (690 | ) | (d | ) | 241,512 | ||||||||||
| Deferred Revenues |
24,083 | — | 24,083 | |||||||||||||
| Accrued Pension Liabilities |
81,550 | — | 81,550 | |||||||||||||
| Other Noncurrent Liabilities |
27,084 | — | 27,084 | |||||||||||||
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| Total Noncurrent Liabilities |
374,919 | (690 | ) | 374,229 | ||||||||||||
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| Redeemable Noncontrolling Interests |
6,447 | — | 6,447 | |||||||||||||
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| Shareholders’ Investment: |
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| Class A Common Stock, $1.00 Par Value |
30,529 | — | 30,529 | |||||||||||||
| Class B Common Stock, $1.00 Par Value |
24,448 | — | 24,448 | |||||||||||||
| Additional Paid-in Capital |
54,647 | — | 54,647 | |||||||||||||
| Retained Earnings |
267,682 | (12,787 | ) | (f | ) | 254,895 | ||||||||||
| Accumulated Other Comprehensive Loss |
(187,537 | ) | — | (187,537 | ) | |||||||||||
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| Shareholders’ Investment Attributable to Shareholders of Crawford & Company |
189,769 | (12,787 | ) | 176,982 | ||||||||||||
| Noncontrolling Interests |
5,061 | — | 5,061 | |||||||||||||
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| Total Shareholders’ Investment |
194,830 | (12,787 | ) | 182,043 | ||||||||||||
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| Total Liabilities and Shareholders’ Investment |
$ | 819,899 | $ | (25,041 | ) | $ | 794,858 | |||||||||
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CRAWFORD & COMPANY
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(a) These adjustments reflect the elimination of Garden City Group operating revenues and costs.
(b) This adjustment reflects the elimination of tax benefit associated with the Garden City Group pretax loss calculated at statutory rates.
(c) This adjustment reflects the receipt of cash consideration at the closing of the transaction, after reduction for transaction costs and cash, as of March 31, 2018.
(d) These adjustments reflect the elimination of assets and liabilities attributable to Garden City Group.
(e) These adjustments reflect the impact to deferred income tax assets and income taxes payable as a result of the loss on the transaction.
(f) This adjustment reflects the loss on the transaction, after adjustment for tax impacts that would result on the transaction, based on the net assets as of March 31, 2018. This estimated loss has not been reflected in the Pro Forma Consolidated Statements of Operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustment under the terms of the agreement.
(g) During the period ended December 31, 2017, Garden City Group incurred nonrecurring pretax charges of $19,598,000 in goodwill impairment and $3,349,000 in restructuring charges. These two charges were not attributable to the transaction, so therefore, were not reflected as adjustments in the Pro Forma Consolidated Statements of Operations presented for that period. For further information about these charges, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.